In e-commerce, demand from consumers around key dates or large events creates a need to fulfil orders quickly to capitalise on the initial market interest. As such, there has been a significant push for expedited shipping.
Strategic locations allow 3PLs to maximise pickup and pushback times. This enables third-party logistics providers (3PLs) to handle increased volumes efficiently. For instance, during a music artist’s launch, they could secure additional capacity to meet the surge in demand, benefiting clients, the 3PL, and the carrier. Alternatively, when challenges emerge, such as the Red Sea crisis, 3PLs can work to find alternative routes and capacity to ensure delivery as planned.
“When planning shipments, it’s important to consider the type of transport and the availability of cargo space. For instance, routes from Vietnam, Hong Kong, or Narita might require a mix of ocean and airfreight,” Tony Ruiz, VP of Logistics of Capacity, explained.
“You might prioritise ocean freight from one location while utilising airfreight from another where cargo space is more available. This strategic approach allows for flexibility and efficiency in meeting shipping needs.
“Following Chinese New Year, airfreight demand increased as businesses rushed to move goods after China’s four-week slowdown. Retail and wholesale calendars dictate whether it makes sense to use ocean freight or airfreight.
“During COVID-19, we saw more frequent use of airfreight due to supply chain disruptions. Although such extreme circumstances are less common now, space on aircraft remains a premium.
“This is partly because fewer wide-body aircraft, which offer more cargo space, are in operation. Passenger aircraft, such as the Boeing 757, have less cargo space compared to the larger 747 or Airbus models. As a result, cargo-only flights are often necessary to secure sufficient space.”
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Taking flight
Given shipping schedules from Asia can be typically four to six weeks, companies might make financial decisions on how to split up shipments to meet the commitments they have made to their customers. This might be an 80/20 or 70/30 split, with the majority going by sea and the urgent goods travelling via airfreight.
Ocean freight can be very effective, but air shipments can complement it to ensure your launch goes smoothly without excessive transportation costs. This balanced approach helps companies to manage their financial exposure while meeting commitments to vendors and customers.
The automated commercial invoicing process has streamlined information exchange between the 3PL, forwarders, and carriers, eliminating issues that would have caused delays 10-15 years ago.
If there is a customs issue or a problem with declarations, this automation and digital exchange ensures that 3PLs can address it much faster now. The real-time capabilities of a strong network allow the 3PL to handle these issues promptly, even with time differences in Europe or Asia.
“What we offer our clients is comprehensive logistical support to ensure smooth operations. First, we make sure all harmonised codes and paperwork are correct by working directly with the forwarder to ensure that all declared values meet their specifications,” Ruiz outlined.
“Additionally, we handle logistical details, such as securing the correct amount of space on flights. It’s crucial to accurately determine the space needed, whether it’s four positions on a plane or twelve. Ensuring these details from the beginning prevents issues later on.
“We also follow up to track shipments and ensure they are correctly processed through customs. By handling the initial paperwork electronically and ensuring accuracy, we can often facilitate seamless customs clearance in the US. This meticulous approach helps streamline the entire process, minimising delays and ensuring timely delivery.”
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Smoother shipments
As the market realigns to match the volume and needs of the industry, Ruiz is clear that 3PLs would greatly benefit by seeing more flexible support from airports and shipping gateways.
Currently, some airports do not operate 24/7 for freight clearance. For example, if freight arrives on a Friday night, capacity might only have 24 hours to clear it and transport it to its facilities without incurring additional fees.
“It would be advantageous for the industry if gateways worked more closely with customers to offer better support,” Ruiz stated.
“Both air and ocean freight services need to consider the varying demands throughout the year. From July to October, there is a surge in shipments due to the wholesale holiday season, whereas February to May sees lower volumes.
“Scaling operational hours to match customer needs based on volume would significantly improve the efficiency and effectiveness of the entire process.”
